How Bob Evans’ “shabby benefits” cost taxpayers money

During his 100 day celebration, after declaring his need to avoid “unforced errors,” Governor Kasich suggested that part of what SB 5 did was bring state government benefits more in line with the “shabby” benefits of private workers like a waitress at Bob Evans. By bringing Ohio’s public employee union benefits, to the “shabby” benefits of minimum wage, non-union jobs like the waitress at Bob Evans saves the State money, Kasich argued.

So, would the State of Ohio save money if it provided benefits like Bob Evans does? No.

In fact, you can argue that even before you consider the $8 million corporate welfare giveaway the Kasich Administration is giving the corporation to move its global HQ from Columbus to nearby New Albany, taxpayers have been subsidizing Bob Evans’ employee benefits for some time.

Looking at just one month of data from the Ohio Department of Jobs and Family Services (July 2010), Ohio Policy Matters was able to see that roughly 13% of Bob Evans employees in Ohio received some form of government assistance to make ends meet. Roughly 4,800 Bob Evans employees and their family members relied on Medicaid to provide them with health care coverage. A little over 4,000 relied on the government to provide their families assistance buying food. And almost 250 made so little working at Bob Evans, they qualified for cash assistance under the Ohio Works First program. What’s worse is that over the last six years, the number of Bob Evans employees relying on government food assistance programs has grown nearly 49% while the number of employees employed by Bob Evans has shrunk by nearly 4%.

If what Policy Matters observed in July ‘10 was reflective of what is seen every month, how much does Bob Evans’ “shabby benefits” cost federal and Ohio taxpayers?

Based on statistical program averages for per-recipient program costs provided by ODJFS, it appears that these annual subsidies could amount to more than $20 million annually.

In other words, we just gave $8 million in corporate welfare to an Ohio company to rebuild a new corporate headquarters with $70 MILLION in profits last year that pays their workers so little it may cost us $20 million a year in welfare benefits to help their workers meet their families basic needs. It is an utter farce for Governor Kasich to suggest that companies like Bob Evans simply cannot afford to provide better benefits for their employees and stay in business.

Bob Evans can’t afford to improve its benefits, Governor? It looks like they could take the taxpayers off the hook and still make $50 million in profits. The problem with Kasich’s assumption is that he believes that the private sector pays the most in benefits they can afford. This is laughably untrue as Bob Evans, Walmart, and countless other businesses demonstrate. Thanks to day trading and the investor class, businesses are under enormous pressure to maximum revenues and minimize costs. They are, after all, for-profit entities. One way businesses are able to keep their cost down, like Bob Evans demonstrates, is by having the government pick up part of their tab in giving their employees a sustainable support system. In other words, welfare for the working poor is another form of corporate welfare.

Government can’t do that. If government pays “shabby” benefits that forces their employees to rely on the social safety net to make ends meet, all your done is transfer payroll expenses to welfare rolls. On a per employee basis, it would appear that companies like Bob Evans that pay their employees “shabby benefits” substantially cost the State more money than even the rosiest of projects by the Kasich Administration suggests SB 5 could save the State. If Ohio provided to its State employees the kind of benefits Bob Evans did, it would cost the State an additional $220 million in new welfare costs. That’s more than the Administration claims SB 5 will “save” Ohio taxpayers using what most consider highly questionable and incredibly rosy “math.”

“People who work should be able to support themselves and their families,” said Wendy Patton, the author of the report. “The plight of these workers and their families illustrates a basic problem in our economy.”

…

“The answer is not that more Ohioans need lower earnings,” said Patton. “More people in Ohio need a living wage and benefits that are not shabby.”

Governor Kasich likes to quote Kennedy’s line about a rising tide raises all boats and applying to taxes. The same can be said about employee benefits. Of all the gaffes for Kasich to walk into, this one might be the worst of them all. The more you look at it, the more disturbing it gets:

It would be interesting know how that data was teased out, and to look at similar data for other retail employers, Target, Home Depot, etc.

HD offers “health insurance” at a really high price, with really high deductibles and co-pays, and really low annual and lifetime limits. An the only employees who can afford that either have at least two jobs or two or more incomes per household.

The full report is linked to in the post. Also, they’ve done similar analysis with WalMart in the past.

Anonymous

I quit eating at Bob Evans over the moving the corporate HQ with taxpayer subsidies. However, I find this data so disgusting, that now I have to give up their sausage from the grocery store. Very sad for their employees.

Fotogirlcb2002

I can not believe the private sector thinks giving these tax breaks are ok
Have they all become deaf — can they not read ?
I say :: Call for the Recall !!

Union Wife

I worked for a large retailer that offered “benefits” to their employees. Although that is a good selling point when trying to fill hourly positions, it is very misleading. For anyone who is part-time (and most are), the basic benefits were very expensive and did not cover things like well-child check-ups and immunizations; it was only for emergency care. In addition to the poor coverage, when an employee can find their hours varying between 4 and 20 hours per week, that cost of coverage can mean actually being in the red when payday comes. Large retailers/chain restaurants in general like to treat employees as though they are an expendable commodity; in our house, we shop the local small businesses first.

Anonymous

Some years ago, after he retired from a factory (not an available option these days) I ran into my Uncle in a Wal-Mart wearing a blue vest. I ask him how long he had been there and he told me less than a week, but that he was quitting because it cost more for him to drive to work than he made in wages. It is a sad state we live in when you have to pay more to work for a company than you receive in compensation. Corporations are not stupid, they know where the loopholes are and they will use them for their stockholder’s benefit. With Kasich and his Bubbas running the show in Columbus, no one is going to stop the pillage by the pirates. Republicans have gotten away with pushing the idea that average working families are over paid and should be thankful to have a job since Ronald Reagan fired the air traffic controllers back in the 1980’s. Why does the Gang Of Pirates want to push working families to the bottom of the heap?

Anonymous

“Gang OF Pirates” – LOL.

“Why does the Gang Of Pirates want to push working families to the bottom of the heap?”

Because doing so firmly entrenches them at the top of the ever-growing heap.

Fotogirlcb2002

Well its not against the law to lie about things– how about just asking people that work there.
If you would tell them you read on the site about these benefits they will laugh .
I can say Kasich is a nice guy — that does not make it so.
Most people at these places are barely over min wage — ask a waitress what they make………….its pretty sad.

Guest

To make rich people richer.

Then it makes it easier for the corporate takeover of us “We the people” at the lowest price. They talk about so called “family values” but don’t value families. But then if they said “we work for rich people (only and especially evil rich people)” no one would vote for them.

Guest

To make rich people richer.

Then it makes it easier for the corporate takeover of us “We the people” at the lowest price. They talk about so called “family values” but don’t value families. But then if they said “we work for rich people (only and especially evil rich people)” no one would vote for them.

All jobs are not created equal. Instead of throwing money at corporations for minimum wage jobs that don’t offer benefits, incentivize for companies to offer a livable wage with health benefits. It is like giving away $$$ twice, first in the form of incentives, then in the form of public assistance benefits, all at the expense of the taxpayers.